Explained | Why Netflix might survive Hollywood strikes of actors, writers

While Netflix is a part of the Alliance of Motion Picture and Television Producers (AMPTP), against which SAG-AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists) has launched a strike, a Reuters report suggests that the streaming giant is much better equipped to deal with it than other streamers and studios.

SAG-AFTRA initiated the strike amid an ongoing labour dispute with AMPTP even as the Writers Guild of America strike continues. That strike, on issues that revolved around several similar topics, began on May 2.

Also Read:Explained | The implications of Hollywood actors' strike and what lies ahead

So the American entertainment industry, already crippled by the lingering effects of the Covid pandemic, is now dealing with a double strike by major unions.

But just why and how is Netflix unlikely to have a severe economic impact unlike the likes of Disney and Warner Bros Discovery?

Let me explain.

Note: I loathe to call TV shows and movies "content" as it diminishes the artistry and creativity that goes into the production, but in business lingo, the one studio execs use, the word prevails. So I am going to use it hereon.

Huge content supply in the pipeline

One of the reasons Netflix can weather the adverse impact of the unavailability of writers and actors is it has a considerable supply of content for the time being, according to the Reuters report.

It can easily release already-produced stuff to seed its platform for months.

For instance, titles with diverse casts and well-known names like action-thriller Heart of Stone, starring Gal Gadot, Alia Bhatt, and Jamie Dornan, will keep up the interest of movie buffs around the world.

It might be odd not to see US-based actors missing from premieres and media junkets, though.

Global shows, international production capabilities

As we know, Netflix is not just reliant on America or even the United Kingdom for its content. Some of the top shows currently are from South Korea, for instance.

In the past few years, the company invested heavily in making localised TV shows and movies for countries like South Korea, Spain, India, and many others.

Some of them like Money Heist from Spain and Squid Game from South Korea have become worldwide sensations. And since actors outside the US are not bound to the strike (having no relation with SAG-AFTRA), Netflix can keep producing stuff overseas until the strike ends.

Also Read:It's a key moment: Oppenheimer director Christopher Nolan expresses support for actors strike

Just in time: The password-sharing crackdown pays off

We may hate this (I certainly do), but the sad fact is, crackdown on password sharing, one of the measures Netflix implemented to bolster its subscriber base, has worked, as the financial reports indicate.

By imposing additional fees on users who share accounts outside the same household, the company even saw a surge in new subscribers.

Data from research firm Antenna indicates that the crackdown resulted in four highest days of user additions in the US in recent years.

Experts predict that this move could lead to roughly half of the 100 million households sharing passwords ultimately creating their individual accounts, bolstering the platform's user base.

This is, I grudgingly assert, rather impressive.

The rise of the ad-supported tier

The ad-supported tier, another measure Netflix put in place to stem the loss of subscribers, and to counter competition from rivals like Disney+, HBO Max (now called just 'Max') and Amazon Prime Video, has also worked for Netflix.

It attracted a growing number of subscribers willing to suffer ads in return for lesser subscription fees.

As per Reuters, many analysts believe that the crackdown on password sharing will serve as a catalyst for more users to opt for the $6.99 ad-supported tier, ultimately generating higher advertising revenue for the streamer.

So, what had troubled Netflix?

We now know Netflix has mostly recovered from the economic blows it suffered last year, which also resulted in several rounds of hundreds of layoffs.

But what brought it to the brink of downfall?

Netflix's issues really began when legacy film studios like Disney and Warner Bros decided to jump on the streaming bandwagon with services like Disney+ and Max, and began to rapidly eat into Netflix's share.

Unlike Netflix, these services came bundled with several decades ofcontent in their catalogue, including millions of hours of well-loved, and rewatch-friendly TV shows like Lizzie McGuire (in the case of Disney +) and Friends (in the case of Max).

In fact, Netflix was the first to stream much of the studio content before they became a competition, which obviously meant these titles stopped playing on the streaming pioneer's platform.

So this meant Netflix had only new content to fall back on, and in an increasingly crowded space, it struggled to market and promote its shows and movies.

However, for now at least, it seemsits troubles are over.

Also Read:Hollywood actors strike: Decoding two main issues — artificial intelligence and residuals

What is behind 2023 WGA, SAG-AFTRA strikes?

The main concerns of the striking actors revolve around two key issues: compensation and the rise of AI.

Residual payments from their various jobs play a crucial role in the livelihood of most actors, enabling them to meet a minimum income threshold necessary for qualifying for health insurance, such as $26,000 per year.

Actors argue that the revenue generated by the industry should be distributed in a manner that supports those who are on the fringes.

There is also a growing unease among actors regarding the increasing use of AI, which is replacing human performers with digitally generated counterparts. This trend poses a significant threat to job opportunities in the acting profession and raises uncertainties about the future of their careers.

Most of the concerns of the writers are the same as actors, though they are in a much worse space, payments-wise.

WATCH WION LIVE HERE

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.